Parents are prepared to pay a premium of up to £19,500 for a home in the catchment area of a top-performing primary school, according to research published today.

Nationwide Building Society looked at the impact on house prices of the local primary school having 10% more 11-year-olds who achieved level four or above in their key stage 2 standard assessment tests (Sats) than surrounding schools.

The lender found that for every 10% increase in the Sats pass rate the average price of a nearby house rose by 3.3%. Across England as a whole this meant an extra £5,860 on the average house price of £176,611.

Nationwide said that in the vast majority of primary schools in England at least 70% of pupils achieved at least a level four in their Sats, while 30% of schools had an average attainment rate of between 90% and 100%.

A house located near one of these top-performing primary schools could command an 11% premium (around £19,500) over an identical property located near a school with Sats results in the bottom 25%.

While house prices in all regions of England were higher if they were in the catchment area for a good school, properties in Yorkshire and Humberside saw the biggest increase in percentage terms of 4.6%, while those in the south-west saw the smallest rise at 2.6%.

Unsurprisingly, although the price premium in London was 3% the capital saw the highest gain in monetary terms at around £8,031.

In 2004, when the society last carried out similar research, it found parents were willing to pay an average premium of around 2.5% to live near a good school. Today's research suggests competition for properties in good catchment areas has increased in the intervening years.

Nationwide's chief economist, Martin Gahbauer, said: "In deciding on a location for their family, parents can place a great deal of focus on the level of education that the local school can provide for their children when growing up.

"Primary school catchment areas tend to be relatively small and are driven by proximity to the school. Therefore, one might expect that families would prefer to live near high performing schools and be willing to pay a premium for this."

But the society said the impact on house prices of being close to a good school was fairly muted compared with other factors that boost a property's price.

Carrying out a loft conversion could raise the value of a home by around 20%, while creating an additional bedroom added 11% and a 10% increase in the floor area boosted prices by 5%, the society said.

Gahbauer added: "On balance, the extent to which primary school performance affects property prices will depend upon the range of schools in the area, and whilst it is something that parents are likely to consider when buying a home it is just one of a number of factors that impact on house prices."